The True Story Of The 1980s, When Everyone Was Convinced Japan Would Buy America

Joe Takagi enjoyed a successful career leading Nakatomi Trading, which had built its U.S. headquarters in Los Angeles, in the film "Die Hard." Google Images

A year and a half into Japanese Prime Minister Shinzo Abe's tenure, results about his bold attempt to revive Japan's moribund economy remain inconclusive. Last week, the FT literally asked whether Abenomics was failing. While Japan's labor market has strengthened, firms have mostly been creating lower-wage jobs, and economic growth has begun to tail off.

It's thus almost inconceivable that a wave of Japanese conglomerates would be able to snap up American corporate assets as investments.

But in the 1980s, it was a fact of life.

Starting with a relative trickle at the beginning of that decade, Japanese corporations went on an epic buying spree in America during the latter half of the decade after both countries agreed to revalue their currencies.

The trend became so widespread that the "Japanese takeover" theme began seeping into American culture.

Via Google News, we now take you on a tour of this singular moment in the life of both countries.

It started out innocently enough, with a handful of Japanese automakers looking to buy out American parts-makers.

Then the trend got real, with a conglomerate purchasing a steel company wholly owned by Ford.

Before long, Japan's influence was being felt across the country — not just in America's cosmopolitan corners, as this article noted, but in places like Texas, Arkansas, and Mississippi, whose museums were suddenly featuring Japanese exhibitions.

Others were more sanguine. "By American super-power standards, Japan is still a minor-league player," wrote Ben Wattenberg.

But the Japan acquisition machine kept going: hotels ...

... tire companies ...

... and movie studios were all snapped up.

The U.S. had aggressively sought liberalization of Japanese markets and a lower value of the U.S. dollar. This was what it got in return. "Sony chairman Akio Morita might be excused for asking bluntly, 'What was it you said you wanted?'" one econ professor wrote.

By October, Japan was in a full-blown market correction that would shatter its economy.

The bubble had burst.

The country began retreating from the U.S.

Mieno's legacy is decidedly mixed at best. "...The economy has gone into the deepest recession since the second world war," The Guardian wrote in 1994. "Yasuhi Mieno, governor of the Bank of Japan, in 1992 was looking for economic recovery somewhere between spring and summer; today he is still searching in vain for green shoots."

REUTERS

Eventually, we came to welcome Japan as a prosperous trading partner.

REUTERS/Larry Downing

Though we still occasionally break out in hysterics when a rising East Asian power comes knocking.